Velocys raises $85 million for smaller-scale GTL

Velocys has raised approximately $85 million through an oversubscribed equity placing, priced at a premium to the market price, the company announced on Monday.

The new funds will be used to build upon the company's recent successes and maintain strong commercial momentum, helping to further accelerate adoption of Velocys technology following the start of construction of its first commercial project.

Velocys enables modular gas-to-liquids (GTL) and biomass-to-liquids (BTL) plants to convert unconventional, remote and problem gas.

"This represents a very substantial vote of confidence from the market," said Roy Lipski, CEO of Velocys. "It maintains our leading position in smaller scale GTL, and with over $100 million of cash on the balance sheet, Velocys is in a strong position as it enters a hugely exciting phase of growth."

New projects announced in the past three months include the construction of a commercial plant using Velocys technology in Oklahoma, through a joint venture with Waste Management, NRG Energy and Ventech Engineers International, formed to develop GTL plants in the US and other select geographies; the acquisition of a leading project developer of smaller scale GTL in North America, together with its 2,800 bpd Ashtabula GTL project in Ohio; and a $70 million endorsement of the company's customer Red Rock Biofuels, received as a grant from the US Department of Defense to construct a 1,100 bpd biomass-to-liquids plant in Oregon using Velocys technology.

"Our vision for bringing smaller scale GTL to the mainstream of the industry is fast becoming a commercial reality," Lipski said. 

"Over the next 24 months, we will be focused on working with our partners to successfully deliver on a number of high profile commercial projects in our growing pipeline of opportunities," he added.

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